Temporal Perspective on the Problem

When documenting a client’s problem, one of the categories of information that the problem statement should include is information about the when the problem occurred. Humans are creatures of “time,” and for many of us it is a fundamental factor in the way we perceive the world, but notions of time vary.  Temporal perspectives are an essential characteristic of culture, and cultural norm often follow from it. Around the world, different people live their daily lives at different tempos, and observe a different pace of life. This may be reflected in the speed at which they walk, the speed of decision-making processes, or how accurately they keep their clocks. The Hopi tribe of Arizona, USA, for example, have a language that lacks verb tenses, and their language avoids all linear constructions in time. The notion of cyclical time is common to religions like Buddhism and Hinduism; and there is considerable controversy among religious scholars as to precisely how “time” is employed in the divine scheme of things. Such cultural temporal perspectives can obviously impact perceptions of problems that we face. A temporal perspective on the problem can bring additional insight and clarity to the client’s problem statement

Temporal perspectives on Problems
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Time is an essential dimension of the world around us. Temporal concepts are fundamental constructs and assumptions of human cognition. Temporal constructs include not just both clock time and psychological time, but also time-sensitive processes; time frame, time courses, and time lags; and the details of the temporal context as a whole. This may be evidenced by temporal language production and comprehension, temporal judgment and temporal reasoning. The concepts of past, present, and future are important mental constructs for structuring experiences. This allows us to organize our perceptual experiences and navigate, mentally, through time. This structuring of experience enables us to bound the temporal scope of decision making and perceived problems 

As creatures of time, humans also change their temporal perspectives. Children develop temporal concepts through life experience and typically view temporal concepts with short time horizons. Adults have a dynamic and flexible temporal perspective – we live in the ever-changing present, and our perception of past, present, and future keeps changing.  Mature Adults (e.g., grandparents) may develop temporal perspectives that cover longer time horizons (e.g., generational).  Time goes so fast that, often, we don’t even notice it. Only when we take a moment of rest, can we see the imprint it leaves on the things around us. Time is a limited resource and people experience strain as they attempt to manage their life, including time pressure, time-based work-family conflict, and time urgency. The attitudes we have towards time can be a significant factor in our perspectives on the problems faced, our decision making, and our performance in resolving those problems. 

It seems that change and time are inseparable: changes take time; are located and ordered in time; and they are separated by time. Even though change clearly takes time (as all changes occur at a finite rate), time does not seem to make change. Most environmental parameters change with time (e.g., temperature, light etc.). With sufficiently large timescales (e.g. geological time) even the ground on which we stand may change due to the effects of time. So too the problems we face can seem quite different when viewed from temporal perspectives with different timescales

Time Perceptions vs Temporal Perspectives

Time perception is a field within psychology cognitive linguistics and neuroscience that refers to the subjective experience, or sense, of time, as measured by someone’s own perception. In addition, different types of sensory information details (auditory, tactile, visual, etc.) are processed at different speeds by the complex systems of our neural mechanisms. Our brains learn to overcome these speed disparities to create a temporally unified representation of the external world. To get events correct timewise, our sensory systems must wait (about a tenth of a second) for the slowest information to arrive. This has the disadvantage of pushing our perceptions slightly into the past; but enables us to assemble perceptually coherent patterns and trends. Many of the problems we face occur at slow timescales relative to our perception, allowing us to develop analyses of the problem; before interacting with it. Some problems occur at on timescales comparable to our perception where the time to analyze the problem is not available, and our response may be simply autonomic reactions without conscious thought. Phenomena from our problems can also occur at timescales much faster than our perceptual threshold. At these timescales we can only directly perceive samples which may be difficult for our sensory systems to interpret, though electronic sensors and other mechanisms may enable indirect observations.   

We are all time travelers in the sense that we all draw on past memories, experience the present and look forward to the future unfolding. Our conceptions of time are fundamental to our reasoning about the sequence of events and consequential decision making.  The temporal aspects include temporal dimensions of events, time granularities, temporal context, temporal patterns, event order, and retrospective and proactive operations. Our assumptions and expectations (e.g. on norms of behavior) often condition our responses.  Sequencing events is fundamental to identifying trends, correlation, causation and the controllable parameters we use to manipulate our environment, and the problems we experience within it.

A temporal perspective refers to a specific point of view or attitude that an actor holds about time. Temporal perspectives involve attitudes, thoughts, and affective tone regarding our personal past, present, and future. Marketing professionals look at temporal perspectives as situational characteristics that deal with the effect of time on consumer behavior. A temporal perspective on the problem includes the actors temporal perspectives as well as the temporal aspects of the problem context.

Conflicts can occur between different with different temporal perspectives – (e.g.,  in a financial investment context, investors with current or future temporal perspectives might be conflicted by disclosure policies – disclosure of a possible risk harms a firm’s current investors, but failure to disclose the risk harms the firm’s future investors). Time perspectives (Zimbardo & Boyd, 1999) involve a tendency to focus on a particular segment of time: past, present, or future.  Your attitudes to your past or future may evaluate positively or negatively.  Your attitude to the present may also be impacted by temporal concepts resulting in perspectives including: “fatalism” (no control), “hedonism” (no consequences) and “carpe diem” (seize the day).  For individuals, balance and positivity comes from making positive use of the past, finding healthy ways to relish the present, and routinely making plans for an improved future; finding a temporal perspective which realizes essential psychological needs and deeply held values. Selecting different temporal perspectives may enable new decision-making opportunities in dealing with the problems of life as we experience it. 

Is your client’s problem sensitive to a temporal perspective on the problem?

Temporal Perspective on Problems
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Is your client’s problem sensitive to a temporal perspective on the problem? They may not be aware of or report such temporal sensitivities. Your client may not recognize the impact of the their temporal attitudes and context in their problem statement or on potential problem solutions. Viable solutions may be cheaper and easier to develop if they only need to be applicable to clients within a reduced scope that can be developed through reframing the temporal perspective on the problem via the problem statement.

When developing the problem statement for your client, understanding the geographic perspective can impact the scope of the desired future state as well as constraints on viable solutions. Our free Guide to Writing Problem Statements can help you get your client program statement right.  

Everyone has Client’s problems that they need to solve, but are they solving the right problem? Are you solving your best problem? Whether you are a researcher, business professional or social entrepreneur, the solutions you develop to the problems that you face matter!  We’d like to hear your view of the most important challenges in writing problem statements for your clients. We have a brief survey on the most important challenges that should take less than 2 minutes to complete. The survey takes less than 2 minutes and you can get started right away by going to this link. I look forward to sharing these insights and resources with you.

A course on the use of perspective to refine problem statements is now available.

  Problem Perspectives Course

If you need help bringing the power of perspective to your client problem statement contact me.

 

The Power of Perspective …

for creativity and innovation

Do you want to boost your creativity and innovation skills?  … solve problems more effectively and collaboratively? … learn how to see the world from different perspectives and discover new possibilities? If you answered yes to any of these questions, then you might be interested in taking a course on the Power of Perspective. This course will teach you how to use perspective-taking, a cognitive skill that allows you to imagine the world from another’s vantage point, to enhance your creativity and innovation.

Perspective-taking is not only a social skill, but also a cognitive skill. It enables you to broaden your horizons, challenge your assumptions, and discover new possibilities. Perspective-taking can also help you to overcome biases, stereotypes, and prejudices that may limit your creativity and innovation, and help you think outside the box .

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Power of Perspective enabling creativity and Innovation.

In this course, you will learn how perspective-taking can benefit you at each stage of the innovation process:

  • Define your problem or challenge. You will learn how to identify the needs and preferences of your customers, users, and beneficiaries by taking their perspectives. You will also learn how to frame your problem or challenge in a way that invites multiple perspectives and solutions.
  • Generate ideas from different perspectives. You will learn how to use your imagination and curiosity to come up with new and original ideas that address the problem or challenge from different angles – e.g. temporal, geographic or other perspectives.. You will also learn how to use brainstorming techniques that leverage perspective-taking. There are many tools such as SCAMPER (Substitute, Combine, Adapt, Modify, Put to another use, Eliminate, Reverse) or TRIZ (Theory of Inventive Problem Solving) that can assist in expanding your power of perspective.
  • Evaluate and refine your ideas. You will learn how to compare and contrast your ideas with the existing solutions and the stakeholders’ needs and preferences by taking their perspectives. You will also learn how to improve your ideas based on feedback from others.
  • Communicate and implement your ideas. You will learn how to choose the best idea or combination of ideas that meet your criteria for creativity and innovation. You will also learn how to explain how your idea solves the problem or challenge from different perspectives. You will also learn how to demonstrate how your idea adds value and impact.

By taking this course, you will not only improve your creativity and innovation skills, but also your collaboration, communication, and leadership skills. You will be able to work with diverse teams and leverage their skills, knowledge, and insights. You will also be able to inspire others and make a difference by taking their perspectives.

If you are interested in taking this Power of Perspective course, please visit our website for more information and registration details. Don’t miss this opportunity to unlock the power of perspective for yourself and your organization.

Problem Perspectives Course

problem solving

Problem Perspectives: Solve your best problem!

Problems are the discrepancy between the current state and some desired future state (your objective). Learn how to use the power of perspective to solve your best problem!

$49.99

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Introduction

  • Change can be a difficult thing to envisage and to manage.
  • Getting it “wrong” can involve significant wasted time and resources as well as potential liabilities from solving the wrong problem
  • Getting is “right” can make a world of difference in problems that matter
  • Getting it “right” is not a matter of finding a better solution technique – its about finding the right problem to solve
  • Identifying the right problem to solve is not a matter of waiting for a stroke of inspiration – it can be approached systematically by refining the statement of the problem.
  • If you think about your problem from the right perspective, you can change yourself, your organization, or the world around you.
  • Be the changemaker that you want to be, by solving the right problem
  • Creative solutions are often described as “Out of the box” thinking
  • 9 Dot puzzle example has a solution that literally draws lines outside the original nine dots – this requires a perspective that the space outside the 9 dots is available for use.
  • Changing perspectives can be approached systematically to examine diverse aspects of the problem space
  • Refining the problem statement from diverse perspectives lets you identify a better problem to solve.
  • Introduction
  • What’s the Problem Statement?
  • Perspective Positioning
  • Geographic perspectives
  • Temporal perspectives
  • Professional Perspectives
  • Choose your best problem!

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Who this course is for:

  • Technology researchers, business professionals, social entrepreneurs, product developers, all need to ensure that they are working on solving problems that matter.
  • The power of perspective in this this course is particularly relevant for those challenged by wicked problems.
  • By developing and refining the problem statement, you will find a better problem to solve.

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What you'll learn

Problems have been described as the discrepancy between the current state and some desired future state (your objective). Your desired outcomes may be an internal change (e.g., in creating new habits) or an external change in the world around you.

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$49.99

This course includes:

Steven Wright

CEO, Macadamia Solutions LLC.

Instructor

Hi, I'm Steven Wright MBA, Ph.D., JD, - engineer, lawyer, professor, entrepreneur - a passionate and committed team player with a strong focus on mentoring, teaching and research and development and successful international experience at negotiating technology agreements that enable new ecosystems in the information technology industry with companies such as Alcatel, Fujitsu, and AT&T. My technology development efforts have produced in excess of 50 US patents. I have worked professionally in four countries and delivered lectures, invited keynotes, as well as executive and panel presentations in others.

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Geographic Perspective on Problems

When documenting a client’s problem, one of the categories of information that the problem statement should include is information about the location of the problem. Location matters for understanding a wide variety of processes and phenomena, whether directly related to human activity or not.  A focus on “real world” relationships and dependencies among the phenomena and processes that give character to any location or place is a contrasting perspective to most other disciplines that treat them in isolation. Places are natural laboratories for the study of complex relationships among processes and phenomena. Geographic boundaries can enable independent operating instances of processes and phenomena generating potentially divergent results that may be explainable in terms of the geographic context.  Capturing this geographic perspective on problems as part of the problem statement starts to scope the geographic boundary of the Client’s problem.

Geographic Perspectives on Problems
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Geographers recognize that the scale of observation – the boundaries of the pace under study – also matters for understanding geographic processes and phenomena at a place.  This geographic perspective on problems inherently provides a geographic scope to the problem.Changing the spatial scale of analysis can provide important insights into geographic processes and phenomena and into understanding how processes and phenomena at different scales are related. Geographic boundaries demarcate contiguous places with common characteristics. Those characteristics might be topological, meteorological, cultural, political, resources environmental conditions or some other dimension of processes and phenomena. Identifying the scales at which particular phenomena exhibit maximum variation provides important clues about the geographic, as well as the temporal, scope of the controlling mechanisms.

Geographic approaches associate meaning with locations or places. Locations or places are commonly referenced in two dimensional spatial representations. Maps and atlases are common examples of such two-dimensional representations. Three-dimensional placement may be important in specific applications, e.g. navigation in aeronautical, submersible, or complex urban environments.  The enduring dimension of the geographic approaches is the significance of spatial scales, from the global to the highly local. The data correlated with the spatial representation may also have multiple dimensions, (often including a time dimension to illustrate changes). Geographers may be challenged to provide effective visualizations with such high dimensional data. Such visualizations can, however, be very effective in illustrating the scope and scale of a problem. Recent trends in adoption and deployment of big data have facilitated the development of various programming languages and tools and resources to facilitate such analyses. 

Geographic perspectives on problems that matter

A perspective is a framework that can be used to interpret the meanings of experiences, events, places, persons, cultures, resources and physical environments. Thinking with a geographic perspective on problems is a powerful tool that can be used to develop a more nuanced and complex understanding of the world. Where something occurs is the spatial perspective; how life forms interact with the physical environment is the ecological perspective.  This perspective is particularly helpful for problems that matter because these problems often have a significant emotional impact from individual narratives.

Problems often exhibit different behavior in different geographic contexts, or other spatial patterns. Problems that matter impact people, and their geographic distributions is far from uniform, being impacted by a number of geographic boundaries. Geographic analysis of spatial analysis can therefore provide new insight into the problem statement.  This insight can identify boundaries on problems correlated with processes and phenomena observable from a geographic perspective. 

Is your client’s problem location sensitive?

Geographic Perspectives on Problems
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Is your client’s problem location sensitive? They may report the location where they last experienced the problem, but probably failed to identify other locations where the same problem might occur. Your client may not recognize the impact of location on potential problem solutions. Solutions that have to span multiple geographic boundaries (whether physical or non-physical) may be more complex and expensive. Conversely, viable solutions may be cheaper and easier to develop if they only need to be applicable to clients within a reduced geographic scope.  

When developing the problem statement for your client, understanding the geographic perspective on problems can impact the scope of the desired future state as well as constraints on viable solutions. If you are developing client problem statements, you might be interested in our free Guide to Writing Problem Statements.  Everyone has Client’s problems that they need to solve, but are they solving the right problem? Are you solving your best problem? Whether you are a researcher, business professional or social entrepreneur, the solutions you develop to the problems that you face matter!  We’d like to hear your view of the most important challenges in writing problem statements for your clients. We have a brief survey on the most important challenges that should take less than 2 minutes to complete. The survey tackles less than 2 minutes and you can get started right away by going to this link. I look forward to sharing these insights and resources with you.

A course on the use of perspective to refine problem statements is now available.

  Problem Perspectives Course

 

If you need help bringing the power of perspective to your client problem statement contact me.

 

The Problem Statement Problem

Problems have been described at the discrepancy between the current state and some desired future state. A problem-cause-solution pattern is common as a critical thinking approach providing argumentation supporting proposed solutions. This approach is particularly attractive if existing predictive models based on the causal actions are available. Based on new inputs to the model, existing predictive models provide a mathematical basis for calculating (predicted) new results within the limitations of the model. As a mathematical technique, predictive models have been successfully applied in a variety field from scientific endeavors to commercial activities like algorithmic stock trading, predicting accident risk for auto insurance, and healthcare outcomes.   

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When considering potential bias in problem solving, the predictive model is often a starting place. A good model is both as accurate as possible, and as simple as possible making it easy to understand and apply – and also easy to misapply if its limitations are not understood. Most models reduce the amount of control data because this simplifies the model enabling easier model development, validation and usage. Models are typically validated over a limited range of control variable values, but reality may not be constrained to that range.  Complex systems in the real world are often affected by multiple control variables, and those may interact in interesting non-linear ways. The phenomenon being modelling is typically assumed to have a stable pattern of behavior, but this assumption is not always true. Humans, animals and artificial intelligence software can all exhibit learning behaviors that evolve over time. Predictive models of systems with learning behaviors developed at one point in time, may not be valid after new behaviors are learned. While model developers strive for prediction accuracy, most models are approximations. The degree of precision of an approximation may limit the predictive power of a model.      

The tools we use alter our perception of the problems we solve – various paraphrased along the line of if one has a hammer, one tends to look for nails (quote investigator 2014). Even professionals with specialist expertise in particular fields tend to look problems from the perspective of their profession. Indeed, they may risk liability issues if they deviate from professional norms. The approach of identifying a cause may be seen as argumentative or evaluative, e.g., when there are multiple causes or explanations leading to a problem. The model development approach looks for variables that can be isolated and controlled, but these may not be the only causes of problems.  In a legal (liability) context, there is a notion of a proximate cause being a cause that produces particular, foreseeable consequences. This typically requires the court to determine that the injury would have occurred, “but for” the negligent act or omission (the proximate cause). The widespread adoption of big data collection and artificial intelligence techniques (e.g., machine learning) has increased attention on the need to move beyond statistical correlation to prove causality. Recent progress in development of causality proofs (e.g. causality notations – (Pearl & Mackenzie 2018) has enabled significant improvements in development of predictive models. While the problem-cause-solution pattern is common, there are situations where action (or a solution) is required without establishment of a cause. The continuing operation of the system may not afford time for causal determination, or the costs on inaction may be too great. In this action bias context, the objective may be to make “reasonable” actions (e.g. to avoid known bad outcomes) rather than attempt to resolve the problem.

A desired future state may be described in objective terms; a desired state, however, must be desired by some real human (ie. it is subjective) as non- humans do not have desires.  Broad consensus on some desired future state may provide some aura of objectivity. “Wicked problems” lie in the area where broad consensus of desired future state does not exist.  If there is no consensus on the desired future state, then that lack of consensus likely applies not just to proposed solutions, or causality model selections, but also to the problem statement.

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Problem statements delimit the scope of the problem to avoid extraneous matters and focus on the information relevant to the problem. The problem statement provides a context and forms a perspective on the problem. Perspectives include not just data observations, but also some meaning associated with those observations, focusing attention on the most relevant/ important observations.  Framing the problem from different perspectives may result in different solutions, e.g., different problem statement will likely have different causal explanations proposed, leading to different solution proposals.There is often a rush to solving a problem rather than clarifying the problem statement first. A problem statement should provide clarity around the four W’s of the problem:

  • Who – Who does the problem affect? Do they recognize it as a problem? Has anyone else validated that the problem is real? Who realizes the value if the problem is solved? Who else might have a useful perspective on the problem?
  • What – What is the nature of the problem? What attempts have been made to resolve the problem?
  • When – When does the problem happen? What are the antecedent and contemporary event? What is the Temporal Perspective?
  • Where – Where does this problem arise? Is there observational data of the problem context correlated with its occurrence? What is the Geographic Perspective on the problem?
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When it comes to your problem – what type of problem solver are you? Ad hoc or intuitive problem solvers risk spending their effort solving the wrong problem and not achieving the impact they might hope for.  A systematic approach to capturing the problem statement and then reframing it from multiple perspectives may take more time initially to develop the problem statement, but avoids the risk of solving the wrong problem. Why is the problem worth solving? Why are you trying to solve it? Once you have your client’s problem statement, you can then refine it to focus on the problems that matter for greater impact.

When developing the problem statement for your client, understanding diverse perspectives can impact the scope of the desired future state as well as constraints on viable solutions. If you are developing client problem statements, you might be interested in our free Guide to Writing Problem Statements

A course on the use of perspective to refine problem statements is now available.

  Problem Perspectives Course

If you need help with your problem statement contact me.

References

(quote investigator 2014) https://quoteinvestigator.com/2014/05/08/hammer-nail/

( Pearl & Mackenzie 2018) Pearl, J., & Mackenzie, D. (2018). The book of why: the new science of cause and effect. Basic Books.

 

Defining and Scoping Smart Contracts

Much of the excitement in recent blockchain literature has been concerned with the potential for “smart contracts” executing autonomously on a blockchain, while (immutably) preserving transaction records. The first use of the “smart contract” term is generally credited to Szabo [Szabo 1997], [Szabo 2002]. [Gisler 2000] proposed requirements for electronic contracts to support legal aspects. Automated execution of electronic contracts predates blockchains and Nakamoto’s Bitcoin paper [Nakamoto 2008]. Automated trading systems were being discussed in the early 1990’s (see e.g., [Domowitz 1990]). Enterprise Resource Planning systems were being extended to detect actual and imminent contractual violations in the early 2000’s (see e.g., [Xu 2003]). XML proposals were made for capturing electronic contracts [Krishna 2004]. [Grigg 2004]’s Ricardian contracts proposal added parameters and prose beyond the code. A markup language for facilitating translating contracts from a human-oriented form into an executable representation for monitoring was developed by [Governatori 2005]. The availability of the solidity programming language in Ethereum [Buterin 2014] created additional momentum with a significant uptick in smart contract related publications starting in 2014 [Macrinici 2018].

The “smart contract” term, originally coined to refer to the general automation of legal contracts, seen a resurgence of interest due to the advent of blockchain technology. Given the variety of systems proposed and the complexity of the technologies underlying smart contracts it is difficult to evaluate many claims concerning their actual capabilities and real potential to change the commercial and legal landscape [Mik 2017]. Generally, smart contracts are computer protocols that implement the terms of a negotiated contract in a self-executing manner [Cieplak 2017]. Recently, the term is popularly used to refer to low-level code scripts running on a blockchain platform [Bartoletti 2017]. [van der Laan 2019] refers to smart contracts as applications that are deployed and executed on a blockchain’s decentralised infrastructure. [Rouhani 2019] considers the smart contract to be a programmable transaction that can perform a sophisticated task, execute automatically, and store on the blockchain. For [Di Angelo 2019a], smart contracts on a blockchain are programs running in a distributed, transparent, and trustless environment. Smart contracts for [Macrinici 2018], are essentially containers of code that encode and mirror the real-world contractual agreements in the cyber realm. Smart contracts are software programs featuring both traditional applications and distributed data storage on blockchains; acting as autonomous agents in critical decentralized applications according to [Praitheeshan 2019]. While the possibilities are endless, this does not help us decide whether a particular thing is or is not a smart contract.

More formally, [ISO 2019] recently defined a smart contract as a computer program stored in a distributed ledger system wherein the outcome of any execution of the program is recorded on the distributed ledger; noting, however, that a smart contract might represent terms in a contract in law and create a legally enforceable obligation under the legislation of an applicable jurisdiction. Some assets manageable by smart contracts (e.g., bitcoin) have been deemed commodities for regulatory purposes. Cryptocurrencies as blockchain applications also fit within this definition of a smart contract [Geirgat 2018]. A regulator [CFTC 2018] issued guidance on smart contracts describing them as fundamentally a set of computer functions, but also noted that they may incorporate elements of a binding (i.e., legally enforceable) contract. The International Swaps and Derivatives Association (ISDA) defines [Clack 2019] a smart contract as an automatable and enforceable agreement; automatable by computer, although some parts may require human input and control; enforceable either by legal enforcement of rights and obligations or via tamper-proof execution of computer code. Blockchain technology provides a platform for the decentralized execution of smart contracts. The class of programs executing in a decentralized manner and storing results in a blockchain includes smart contracts; not all such blockchain decentralized applications (dapps), however, are required to have any association with a contract; nor are autonomous programs executing legal contracts required to be decentralized. For the purposes of most technology-focused discussions, it would be less confusing to refer to dapps rather than smart contracts unless the dapp is envisaged as fulfilling some specific contractual function.

As computer code, a smart contract executes in the context of a particular virtual machine supported by a particular blockchain. Smart contracts can invoke other smart contracts executing in the same or other blockchains. Not all data sources for the smart contract are natively found in the environment of a single blockchain. A smart contract is an agreement that is automatically executed when certain conditions are met [Fournier 2019]. “Oracles” provide a mechanism for off-chain data to be made available for the smart contract executing in the blockchain. Many early smart contracts have been focused on financial applications. Off-chain financial data inputs to a smart contract might be prices of assets, or confirmation of trades from other blockchains, e.g. in an exchange between bitcoin and some other cryptocurrency. Hence, we can conclude that a smart contract executing in one particular blockchain environment may have input/output operations on its own blockchain or on an arbitrary number of other blockchains.

A key feature of smart contacts is the autonomous algorithmic execution based on a mapping of certain detectable states of nature to corresponding contractual actions [Bakos 2019]. With the advent of IoT blockchains, a broad range of cyber-physical data from sensors can become an input to smart contracts. To release their potential, it is necessary to connect the contracts with the outside world, such that they can understand and use information from other infrastructures [Guarnizo 2019]. Beyond financial applications, blockchains are also being proposed to control devices in the physical world [Lee 2019]. This implies that blockchain smart contracts could be used to control not just digital assets, but also physical devices.  A smart contract is not required by its definition to have physical I/O. hence smart contracts may have [0..n] inputs or outputs in the physical world.

All blockchains have performance limitations due to the computational and communication overheads of such decentralized systems. A blockchain execution environment, may not be the most suitable for all classes of workloads. The time for deployment and computation (including consensus) in blockchains may be significantly larger than in (non-blockchain) off-chain systems. Some blockchains also have an explicit cost for transactions (and computations) on chain (e.g., Ethereum gas). Computations on blockchains are reportedly cost two orders of magnitude more than regular cloud computing [Rimba 2017]. This has resulted in architecture proposals (e.g. [Eberhardt 2017], [Gudgeon 2019]) where the smart contract computation is moved off-chain and only the result is recorded in some transaction on the blockchain. Building on cloud computing concepts, Blockchain as a Service (BaaS) has been proposed to improve the productivity of application development, including support for smart contract design services [Lu 2019]; such an approach architecturally separates the smart contract from the underlying blockchain. In the typical case, the smart contract executes in the virtual machine of one blockchain. A “smart contract” executing entirely off-chain might be better referred to as an electronic contract; in general, such electronic contracts could execute in an arbitrary number of off-chain devices. A smart contract developed and deployed through blockchain as a service may be deployed and executed across an arbitrary number of blockchains.

Number of blockchains as I/O 1..n
Number of cyber-physical devices as I/O 0..n
Number of on blockchains where executing 0..n
Number of off-chain nodes where executing 0..n

Automation of trading functions and contractual obligations has been discussed in the literature for more than 20 years. The availability of blockchains with cryptographic transaction signatures and robust, immutable, decentralized transaction databases has given the topic additional impetus. General-purpose programming languages operating over blockchains have expanded the potential applications for blockchains. Flexibility can be helpful but also generates complexity in operation and administration. Not all dapps are smart contracts; code to automate and enforce an agreement does not always require an underlying blockchain. Smart contracts are not just algorithms, they can, and increasingly are, connected into our cyber-physical reality. Other computing systems have had such capabilities generating physical effects for some time. With smart contracts, these systems now have added contractual legal effects as well. 

References

[Bakos 2019] Y. Bakos, & H. Halaburda. “When Do Smart Contracts and IoT Improve Efficiency? Automated Execution vs. Increased Information.” Automated Execution vs. Increased Information (May 26, 2019). NYU Stern School of Business (2019).

[Bartoletti 2017] M. Bartoletti & L. Pompianu. “An empirical analysis of smart contracts: platforms, applications, and design patterns.” International conference on financial cryptography and data security. Springer, Cham, 2017.

[Buterin 2014] V. Buterin, “A next-generation smart contract and decentralized application platform.” white paper 3 (2014): 37.

[CFTC 2018] LabCFTC, “A Primer on Smart Contracts”, November 208.

[Cieplak 2017] J. Cieplak, & S. Leefatt. “Smart Contracts: A Smart Way to Automate Performance.” Geo. L. Tech. Rev. 1 (2017): 414-418.

[Clack 2019] C. Clack, & C. McGonagle. “Smart Derivatives Contracts: the ISDA Master Agreement and the automation of payments and deliveries.” arXiv preprint arXiv:1904.01461 (2019).

[DiAngelo 2019a] M. Di Angelo & G. Salzer. “Mayflies, Breeders, and Busy Bees in Ethereum: Smart Contracts Over Time.” Third ACM Workshop on Blockchains, Cryptocurrencies and Contracts (BCC’19). ACM Press, 2019.

[Domowitz 1990] I. Domowitz, “The mechanics of automated trade execution systems.” Journal of Financial Intermediation 1.2 (1990): 167-194.

[Eberhardt 2017] J. Eberhardt, & S. Tai. “On or off the blockchain? Insights on off-chaining computation and data.” European Conference on Service-Oriented and Cloud Computing. Springer, Cham, 2017.

[Fournier 2019] F. Fournier, & I. Skarbovsky. “Enriching Smart Contracts with Temporal Aspects.” International Conference on Blockchain. Springer, Cham, 2019.

[Geiregat 2018] S. Geiregat, “Cryptocurrencies are (smart) contracts.” Computer law & security review 34.5 (2018): 1144-1149.

[Gisler 2000] M. Gisler, et. al., “Legal Aspects of Electronic Contracts.” ISDO. 2000.

[Governatori 2005] G. Governatori,”Representing business contracts in RuleML.” International Journal of Cooperative Information Systems 14.02n03 (2005): 181-216.

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